How much does it cost to sell a house in Wisconsin?
Are you getting ready to sell your house and wondering how much it will cost? Before you put it on the market, you might want to have an idea about the expenses involved.
Commission - One of the largest expenses of selling a home is the real estate brokerage fee. By law, this amount varies and is negotiable, however this typically ranges to be 5-7% of the purchase price. While this can seem like a lot of money, it is often split a number of ways. In Wisconsin and most real estate deals there is an agent representing the seller (called the listing agent) and an agent representing the buyer (typically the buyer's agent). This commission amount is often shared between the two agents and then part of it is split with the agents brokerage firm.
Administrative fees - Depending on the agent and brokerage there can be added administrative fees. This amount varies greatly, but could be $200 to $1,000 depending on the company.
Transer fee - This is required by the State of Wisconsin and as of the date of this blog post amounts to $3 per 1000 of the sale price. From January to October of 2014, the average sale price for Dane county (Madison area) is $249,819. Based on this amount, the transfer tax fee would be $749.
Title insurance - This is included in most real estate transactions so that the property will transfer free and clear into the buyer's name. Often this is charged based on the sale price of the home. Using the average sale price of $249,819 again it could amount to $800 to $1500, depending on the title company that is chosen.
Deed preparation - When you purchase a property in Wisconsin you will get a deed. You should consult your attorney about what type of deed is best for you. This is usually a smaller cost of the sale and should not be more than a few hundred dollars.
Special assessment - To make sure there are no special assessments for the property, this cost covers the search for special assessments. Again, a much smaller cost and should not be more than a few hundred dollars.
Gap endorsement - This covers the gap in title insurance from the date of the title commitment and the date that it is actually recorded in the register of deeds. Again, a much smaller cost and should not be more than a few hundred dollars.
Home warranty - This is an optional cost that may be paid by the buyer or the seller. A home warranty will typically cover items such as appliances, furnace, air conditioning, light fixtures, etc. Similar to a car warranty, this will not cover everything in the house but will cover most things. They often have a small deductible to pay before the warranty covers anything and the term is usually 1 year. Costs range from $400 to $800 from most of the companies we recommend.
Pre-inspection - If you have an older home it might be a good idea to have a pre-inspection done on the home. While many times a buyer will pay for their own inspection, sometimes it might be a good idea to have this done before putting the home on the market. Discuss with your agent if this is a good idea or not. Inspections can be $300 to $500 for a basic home and much more for multi-unit or larger properties.
Home staging - Have you seen HGTV? I'm sure you know that home staging can make a BIG difference in the final sale price and how fast your home will sell. Some of the best agents may do staging themselves or offer some suggestions to other professional home stagers. This might be a few hundred dollars for a consultation and could be a few thousand dollars if you will be bringing in furniture and other staging items.
Well, septic, and water inspections - If you live in the country then you are familiar with well, septic, and water inspections and testing. These could add a few hundred dollars to the cost of the sale and can be done before listing the property or at the time of the buyer's inspection.
Property tax proration - If you don't set aside monthly payments in an escrow account for property taxes then you will have to pay your prorated amount to the buyer for property taxes. If you close at the beginning of the year, then this will be a much smaller amount than if you close at the end of the year.
We hope you found this blog post helpful as your prepare for the upcoming costs to sell your home. If you're getting more serious about selling your home, then we would like to interview to be your listing agent. When you choose Josh Lavik and his real estate team to help you sell your home we will provide an exact estimated seller's net sheet that shows all the costs of the sale. Contact us today at 608-620-4234 to sell your home in the Madison area.